SCA winds up unlisted fund after $70m portfolio sale

Real estate investment trust Shopping Centres Australasia Property Group has wound up one of its unlisted funds after offloading a portfolio of five retail properties for about $70 million as private investors secure ‘‘non-discretionary’’ shops in a diverging two-speed property market.

Two properties – Big W in Inverell and Dan Murphy’s in Burwood – were sold directly to one investor while three others – a Dan Murphy’s in Katoomba, a Woolworths in Fairfield in Sydney’s outer west and a Woolworths in Griffith – were marketed by JLL’s Sam Hatcher and Jacob Swan and sold to separate individual wealthy buyers.

The one asset the fund lost money on was the Inverell Big W.

While the fund could have been extended beyond its nominal five-year term, SCA Property chief executive Anthony Mellowes said it was decided that it was in the best interests of shareholders to close the fund.

‘‘We purchased the properties four and a half years ago for $60.9 million and we achieved $69.3 million, so a 14 per cent increase, and basically that’s why we did it because we thought the market was very good,’’ he said.

The distribution of capital on completion of the sale of the assets is expected to equate to about $1.12 for each $1 invested.

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Despite the Griffith Woolworths and Dan Murphy's Katoomba selling slightly below book value, an overall premium was achieved on the total portfolio at 1.3 per cent.

The one asset the fund lost money on was the Inverell Big W, which was originally bought for $18.4 million but sold recently for $15 million. SCA blamed this on the recent announcement by Woolworths Group of its intention to close a number of its Big W outlets.

"Swings and roundabouts is the benefit of having five assets instead of one. We did well on four of them," Mr Mellowes said.

Tale of two markets

"You've got the retail which is the every day spend retail, such as your supermarkets, pharmacies and medical services, hairdressers and nail bars. They are all tracking along as they have always tracked along," he said.

"The retailers that have gone into administration more recently, the likes of Jeanswest and Harris Scarfe, they are more at the discretionary end – but everyone lumps it all together as retail."

In another recent property deal at the upper end of the market, title records show US private equity giant Blackstone has offloaded Brimbank Plaza, a single level sub-regional shopping mall in Melbourne, to Malaysian real estate giant Mulpha, as foreshadowed by The Australian Financial Review.

It is understood the property sold for about $150 million. At that price, it would have sold at a discount to book value of more than $160 million. It was originally marketed with an asking price of about $170 million.

CBRE director investments Mark Wizel, who oversaw the marketing of the property with Justin Dowers and Lewis Tong, confirmed the sale but would not discuss the price.